Dorel Reports Second Quarter 2025 Results

• Dorel Juvenile delivers solid earnings performance led by growth in international markets
• Dorel Home implementing restructuring strategy amidst a challenging market

MONTRÉAL, Aug. 08, 2025 (GLOBE NEWSWIRE) -- Dorel Industries Inc. (TSX: DII.B, DII.A) today announced its financial results for the second quarter and six months ended June 30, 2025.

Second quarter revenue was US$292.4 million, compared to US$348.1 million, a decrease of 16.0% from the same period a year ago. Reported net loss was US$44.9 million or US$1.38 per diluted share, compared to US$59.5 million or US$1.83 per diluted share last year. Adjusted net loss¹ was US$21.1 million or US$0.65 per diluted share compared to US$13.6 million or US$0.42 per diluted share last year.
 
Revenue for the six months was US$612.8 million, compared to US$699.1 million, down 12.3% from the prior year. Reported net loss was US$70.2 million or US$2.15 per diluted share, compared to US$77.1 million or US$2.37 per diluted share a year ago. Adjusted net loss¹ for the six months was US$44.8 million or US$1.37 per diluted share, compared to US$30.5 million or US$0.94 per diluted share last year.

"Dorel Juvenile delivered a strong second quarter in 2025, building on the momentum from the start of the year, and overcoming the challenges posed by U.S. tariffs. Our performance was driven by strong growth in Europe and key international markets, disciplined cost control and favourable foreign exchange movements. Dorel Home experienced a difficult second quarter with tariff uncertainty and liquidity constraints impeding sales. On June 30th, 2025, we announced our expanded restructuring plan and are actively implementing changes to reduce costs and further streamline operations. We remain confident that the benefits of our Home segment transformation will begin to emerge in the fourth quarter of this year, with full impact expected in 2026, " stated Dorel President & CEO, Martin Schwartz.

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¹ This is a non-GAAP financial ratio or measure with no standardized meaning prescribed by IFRS and therefore is unlikely to be comparable to similar measures presented by other issuers. Refer to the section “Definition and reconciliation of non-GAAP financial ratios and measures” in this press release.

Second quarter revenue was US$218.1 million, an increase of US$1.6 million, or 0.8% versus last year. Organic revenue¹ decreased slightly by 0.4%, after removing the impact of varying foreign exchange rates year-over-year. The growth in the second quarter came from markets other than the U.S. which faced headwinds from tariff-related market instability. Many U.S. customers paused orders as they waited for clarity on the long-term strategy of the U.S. administration on tariff rates. Excluding the decline in revenue in the U.S. market Dorel Juvenile experienced revenue growth of approximately 12% for the quarter. This slow down meant that year-to-date revenue of US$433.9 million, represented an increase of US$4.8 million, or 1.1% from US$429.1 million in 2024. The year-to-date organic revenue¹ increase was approximately 1.8%.

Adjusted operating profit¹ for the quarter was US$7.8 million, US$1.0 million higher than the prior year. Dorel Juvenile Europe was the principal contributor to the improved earnings, more than offsetting the impact of lower sales and earnings in the U.S. Earnings were also helped by favourable foreign exchange rates versus the prior year. Year-to-date adjusted operating profit¹ was US$12.0 million, an increase of US$4.0 million or 50.6% versus prior year. Similar to the quarter, Dorel Juvenile Europe was the principal contributor to improved earnings, offsetting declines in the U.S. The majority of the other Juvenile markets have also increased earnings year-to-date versus the prior year as the Juvenile segment overall continues to grow sales and earnings.

Second quarter revenue was US$74.3 million, a decrease of US$57.3 million, or 43.5%, from US$131.6 million last year. The decline was driven primarily by reduced e-commerce gross sales, which declined approximately 51%, and ongoing product availability issues stemming from liquidity constraints and tariff uncertainty. Brick-and-mortar and omni-channel sales accounted for approximately 56% of gross sales in the quarter, up from approximately 49% in the same period last year, reflecting a strategic shift in channel focus. Six-month revenue was US$178.9 million, a decrease of US$91.1 million, or 33.7%, from US$270.0 million last year.

The adjusted operating loss¹ for the quarter was US$12.7 million, compared to US$8.3 million in the same period last year. The principal cause was lower sales volumes which more than offset the benefit of a lower cost structure that was part of the initial restructuring program implemented prior to the June 30^th, 2025 announcement of further cost reduction initiatives. Year-to-date adjusted operating loss¹ was US$23.9 million versus US$11.7 million in the prior year. Despite these pressures, the Home segment generated significant free cash flow in the second quarter, primarily through inventory reductions and improved accounts receivable collections. 

In response to these and other challenges, Dorel announced an accelerated restructuring plan on June 30^th, 2025, including the decision to cease manufacturing operations at its Cornwall, Ontario facility. It is expected that the wind-down of these operations will be completed by the end of the third quarter of this year to minimize losses and fulfil customer obligations. This decision is part of a broader transition to a leaner organization with a reduced product line, focused on profitable categories. The segment will operate with a reduced footprint and integrate back-office operations into Dorel Juvenile’s infrastructure. The Home segment is actively working on exiting product categories that are now considered non-core, including a plan to significantly reduce inventory by the end of the year, thereby allowing for a smaller distribution footprint. Warehouse consolidation efforts are underway, with Canadian and California operations transitioning into Dorel Juvenile facilities. The Company is also finalizing its East Coast distribution strategy.

During the quarter, the Home segment recorded restructuring costs of US$22.4 million, of which US$13.2 million was for the non-cash write-down of equipment and inventory. The remaining amount of US$9.2 million was for accrued severance costs, the majority of which is to be paid out after the closure of the Cornwall manufacturing operations at the end of the third quarter of this year. The benefits of the Cornwall, Ontario, manufacturing facility closure will begin only in the fourth quarter of this year, however included in the severance amount were other headcount reductions initiated in May, generating US$0.8 million in monthly savings beginning in June 2025.

Long-Term Debt and Financing Update

On August 7, 2025, the Company announced it again amended its asset backed loan facility and term loan facility whereby Dorel’s lenders agreed to continue to forebear from enforcing their rights and exercising their remedies under both the ABL facility and term loan facility further to a default by Dorel relating to certain financial covenants. As part of the amendment, the Company will receive access to US$20.0 million additional liquidity under the ABL facility, available in three tranches subject to meeting availability requirements, in order to finance new inventory and must continue to provide the lenders with additional reporting during the forbearance period.

Also as previously announced, the Company has engaged two leading capital market advisors to assist in re-capitalizing the Company’s balance sheet to allow for growth in the Juvenile segment and support the re-organization of the Home segment. The new structure will replace the current debt structure which no longer matches the Company’s needs. As of today, the process has advanced, and the Company expects a new structure to be in place around the end of the third quarter of this year.

Outlook

“Despite the challenges of U.S. tariffs, the Juvenile segment is well positioned relative to competitors based on its worldwide footprint and domestic manufacturing capabilities in the U.S. This was evidenced in the second quarter as reduced earnings in the U.S. were more than offset by improved earnings in our other markets. With our facilities in the U.S., which could present further opportunities going forward, and our strong international business, we expect to continue to improve earnings and remain on track for a better 2025 versus 2024. Dorel Home is entering a pivotal phase in its transformation journey, with the second half of 2025 focused on executing the structural changes initiated this year. We are confident that the actions taken, streamlining operations, integrating with Dorel Juvenile, and transitioning to a more agile distribution model, will position us for a return to profitability in 2026,” commented Dorel President & CEO, Martin Schwartz.

"The Company continues to work with key customers and suppliers to maintain strong relationships during this period of transition and we are appreciative of that support. We are on track to secure additional financing, and when we do this added liquidity will mean a much healthier Dorel on day one. This will coincide with our reduced cost structure in Dorel Home, and with our on-going growth in Dorel Juvenile, we will have the ability to better serve our customers and work even more closely with our key suppliers,” concluded Mr. Schwartz.

Conference Call

Dorel Industries Inc. will hold a conference call to discuss these results on Monday, August 11, 2025 at 11:00 AM Eastern Time. Interested parties can join the call by dialing 1-833-752-3231. The conference call can also be accessed via live webcast at http://www.dorel.com. If you are unable to call in at this time, you may access a recording of the meeting by calling 1-855-669-9658 and entering the passcode 8352001 on your phone. This recording will be available on Monday, August 11, 2025 as of 2:30 PM until 11:59 PM on Monday, August 18, 2025.

Unaudited condensed consolidated interim financial statements as at June 30, 2025 will be available on the Company 's website, www.dorel.com, and will be available through the SEDAR+ website.

Profile

Dorel Industries Inc. (TSX: DII.B, DII.A) is a global organization, operating two distinct businesses in juvenile products and home products. Dorel’s strength lies in the diversity, innovation and quality of its products as well as the superiority of its brands. Dorel Juvenile’s powerfully branded products include global brands Maxi-Cosi, Safety 1st and Tiny Love, complemented by regional brands such as BebeConfort, Cosco, Mother’s Choice and Infanti. Dorel Home, with its comprehensive e-commerce platform, markets a wide assortment of domestically produced and imported furniture. Dorel has annual sales of US$1.3 billion and employs approximately 3,500 people in facilities located in twenty-two countries worldwide.

Caution Regarding Forward-Looking Statements

Certain statements included in this press release may constitute “forward-looking statements” within the meaning of applicable Canadian securities legislation. Except as may be required by Canadian securities laws, the Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements, by their very nature, are subject to numerous risks and uncertainties, including statements regarding the substantial reduction in size of Dorel’s Home segment, the implementation of new financing arrangements, the impact of the macro-economic environment, including inflationary pressures, changes in consumer spending, exchange rate fluctuations, the imposition of tariffs, and high interest rates on the Company’s business, financial position and operations, and are based on several assumptions which give rise to the possibility that actual results could differ materially from the Company’s expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. As a result, the Company cannot guarantee that any forward-looking statement will materialize, or if any of them do, what benefits the Company will derive from them including statements relating to the substantial reduction in the size of the Home segment and the implementation of new financing arrangements intended to replace the Company’s current debt structure. Forward-looking statements are provided in this press release for the purpose of giving information about management’s current expectations and plans and allowing investors and others to get a better understanding of the Company’s operating environment. However, readers are cautioned that it may not be appropriate to use such forward-looking statements for any other purpose.

Forward-looking statements made in this press release are based on a number of assumptions that the Company believed were reasonable on the day it made the forward-looking statements. Factors that could cause actual results to differ materially from the Company’s expectations expressed in or implied by the forward-looking statements include:

• general economic and financial conditions, including those resulting from the current high inflationary environment;
• changes in applicable laws or regulations;
• changes in product costs and supply channels, including disruption of the Company’s supply chain resulting from the macro-economic environment;
• foreign currency fluctuations, including high levels of volatility in foreign currencies with respect to the US dollar reflecting uncertainties related to the macro-economic environment;
• the effect of tariffs on imported goods;
• customer and credit risk, including the concentration of revenues with a small number of customers;
• costs associated with product liability;
• changes in income tax legislation or the interpretation or application of those rules;
• the continued ability to develop products and support brand names;
• changes in the regulatory environment;
• outbreak of public health crises that could adversely affect global economies and financial markets, resulting in an economic downturn which could be for a prolonged period of time and have a material adverse effect on the demand for the Company’s products and on its business, financial condition and results of operations;
• the effect of international conflicts on the Company’s sales;
• continued access to capital resources, including compliance by the Company with all of the covenants under its ABL facility and term loan facility, and the related costs of borrowing, all of which may be adversely impacted by the macro-economic environment;
• failures related to information technology systems;
• changes in assumptions in the valuation of goodwill and other intangible assets and any future decline in market capitalization;
• there being no certainty that the Company will declare any dividend in the future;
• increased exposure to cybersecurity risks as a result of remote work by the Company’s employees;
• the Company’s ability to protect its current and future technologies and products and to defend its intellectual property rights;
• potential damage to the Company’s reputation; and
• the effect of climate change on the Company.
  
  

These and other risk factors that could cause actual results to differ materially from expectations expressed in or implied by the forward-looking statements are discussed in the Company’s annual MD&A and Annual Information Form filed with the applicable Canadian securities regulatory authorities. The risk factors set out in the previously mentioned documents are expressly incorporated by reference herein in their entirety.

The Company cautions readers that the risks described above are not the only ones that could impact it. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial may also have a material adverse effect on the Company’s business, financial condition, or results of operations. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

All figures in the tables below are in thousands of US $, except per share amounts.

Definition and Reconciliation of Non-GAAP Financial Ratios and Measures

Dorel presents in this press release certain non-GAAP financial ratios and measures, as described below. These non-GAAP financial ratios and measures do not have a standardized meaning prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other issuers. These non-GAAP financial ratios and measures should not be considered in isolation or as a substitute for a measure prepared in accordance with IFRS. Contained within this press release are reconciliations of the non-GAAP financial ratios and measures to the most directly comparable financial measures calculated in accordance with IFRS.

Dorel believes that the non-GAAP financial ratios and measures used in this press release provide investors with additional information to analyze its results and to measure its financial performance by excluding the variation caused by certain items that Dorel believes do not reflect its core business performance and provides better comparability between the periods presented. Excluding these items does not imply they are necessarily non-recurring. The non-GAAP financial measures are also used by management to assess Dorel 's financial performance and to make operating and strategic decisions.

Adjustments to non-GAAP financial ratios and measures
As noted above, certain of our non-GAAP financial measures and ratios exclude the variation caused by certain adjustments that affect the comparability of Dorel’s financial results and could potentially distort the analysis of trends in its business performance. Adjustments which impact more than one non-GAAP financial ratio and measure are explained below.

Restructuring costs
Restructuring costs are comprised of costs directly related to significant exit activities, including the sale of manufacturing facilities, closure of businesses, reorganization, optimization, transformation, and consolidation to improve the competitive position of the Company in the marketplace and to reduce costs and bring efficiencies, and acquisition-related costs in connection with business acquisitions. Restructuring costs are included as an adjustment of adjusted gross profit, adjusted gross margin, adjusted operating profit (loss), adjusted net income (loss) and adjusted diluted earnings (loss) per share. Restructuring costs were respectively US$23.8 million and US$25.4 million for the three and six months ended June 30, 2025 (2024 – US$0.6 million and US$1.4 million). Refer to the section “Impairment loss on goodwill and restructuring costs” in the MD&A for more details.

Impairment loss on goodwill
Impairment loss on goodwill is included as an adjustment of adjusted operating profit (loss), adjusted net income (loss) and adjusted diluted earnings (loss) per share. Impairment loss on goodwill was respectively $45.3 million and $45.3 million for the three and six months ended June 30, 2024 (none in 2025). Refer to the section “Impairment loss on goodwill and restructuring costs” in the MD&A for more details.

Adjusted gross profit and adjusted gross margin
Adjusted gross profit is calculated as gross profit excluding the impact of restructuring costs. Adjusted gross margin is a non-GAAP ratio and is calculated as adjusted gross profit divided by revenue. Dorel uses adjusted gross profit and adjusted gross margin to measure its performance from one period to the next, without the variation caused by the impacts of the items described above. Dorel also uses adjusted gross profit and adjusted gross margin on a segment basis to measure its performance at the segment level. Dorel excludes this item because it affects the comparability of its financial results and could potentially distort the analysis of trends in its business performance. Certain investors and analysts use the adjusted gross profit and adjusted gross margin to measure the business performance of the Company as a whole and at the segment level from one period to the next, without the variation caused by the impact of the restructuring costs. Excluding this item does not imply it is necessarily non-recurring. These ratios and measures do not have any standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to a similar measure presented by other companies.

Organic revenue growth (decline) and adjusted organic revenue growth (decline)
Organic revenue growth (decline) is calculated as revenue growth (decline) compared to the previous period, excluding the impact of varying foreign exchange rates. Adjusted organic revenue growth (decline) is calculated as revenue growth (decline) compared to the previous period, excluding the impact of varying foreign exchange rates and the impact of the acquired businesses for the first year of operation and the sale of divisions. Management uses organic revenue growth (decline) and adjusted organic revenue growth (decline) to measure its performance from one period to the next, without the variation caused by the impacts of the items described above. Dorel excludes these items because they affect the comparability of its financial results and could potentially distort the analysis of trends in its business performance. Certain investors and analysts use organic revenue growth (decline) and adjusted organic revenue growth (decline) to measure the business performance of the Company as a whole and at the segment level from one period to the next. Excluding these items does not imply they are necessarily non-recurring. These measures do not have any standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to a similar measure presented by other companies.

CONTACTS:
Dorel Industries Inc.
John Paikopoulos
(514) 934-3034

Dorel Industries Inc.
Jeffrey Schwartz
(514) 934-3034

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